Nanocrystalline ZrO2 particles doped with Dy3+ ions have been synthesized by a simple co-precipitation method. The structural and optical properties of Dy3+-doped ZrO2 particles are investigated using the X-ray powder diffraction, transmission electron microscopy, and photoluminescence spectroscopy. The photoluminescence characteristics originating from Dy3+-doping in the ZrO2 nanoparticles were systematically investigated. Experimental results reveal that the luminescence can be affected by both the calcining temperature and the Dy3+ concentration in the ZrO2 nanoparticles.